In a move to address its rising debt levels, BP (NYSE:BP) is actively looking for buyers interested in acquiring a portion of its U.S. natural gas pipeline network, Reuters reported. Sources familiar with the situation have reported that the company might secure up to $3 billion from the transaction. One source indicated that BP is considering selling up to a 49% stake in the network.
The decision to sell assets is part of a broader strategy by BP's CEO, Murray Auchincloss, to reduce the company's debt, which has escalated over the past year. The sale is one of several planned divestitures, including stakes in Lightsource BP, its solar segment, and both its onshore and offshore wind operations in the U.S. Auchincloss aims to bolster cash flow and cut down the company's debt, with a strategic update expected to be provided in February.
BP's net debt increased to $24.3 billion by the end of September, up from $22.3 billion the previous year, partly due to asset sales falling short of expectations, as revealed in the company's third-quarter results.
The company's stock has not been performing well, with a decline of over 18% in value this year, a sharper drop than its industry counterparts. In comparison, Shell (LON:SHEL)'s stock has decreased by 3%, while ExxonMobil (NYSE:XOM) has seen a 14% rise, and Chevron (NYSE:CVX) has experienced a nearly 7% gain.
The U.S. oil and gas pipeline industry has seen a trend of consolidation in recent times, driven by growing production and challenges in obtaining permits for new pipelines, which has made existing infrastructure increasingly valuable.
BP's U.S. pipeline assets encompass approximately 1,500 miles and are responsible for transporting 1.1 million barrels per day of crude oil, natural gas, and other fuels across the country. The company has refrained from commenting on the sale, and the individuals who disclosed this information did so on the condition of anonymity, as they were not authorized to speak publicly on the matter.
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